Mobility-as-a-Service at the ARC Smart City Forum

Category:
Technology Trends

Transportation is one of the fastest-changing and most exciting sectors in the global economy. Connected & autonomous vehicles, shared mobility concepts, and the shift to electric vehicles (together referred to as CASE) are some of the most exciting avenues.  At ARC’s 24th annual Industry & City Forum, we hosted a session charting the future of mobility. We were joined by four leaders in the mobility space, sharing their perspectives on the CASE transformation through presentations and an open panel discussion. In this article, we will look at the Mobility-as-a-Service (MaaS) presentation given by Pete Costello - AVP at transportation technology company Iteris.

Mobility-as-a-Service

What is Mobility-as-a-Service?

Mr. Costello began by presenting the broad need for transportation, stressing its centrality to the global economy and our ever rising standard of living. He then introduced the MaaS concept, as well as its genesis under industry founder and current CEO of MaaS Global, Sampo Hietanen (ARC interviewed Sampo on the Smart City Podcast a few weeks after the event). 

He describes the mission of MaaS as reducing the prevalence of single occupancy vehicles, lowering pollution, raising vehicle utilization rates, and improving the human experience by bringing “Multimodal and sustainable mobility services addressing customers’ transportation needs by integrating planning and payment on a one-stop-shop principle”.
The idea is for a customer to be able to conveniently access whatever transportation mode, or combination of modes, they need to get where they’re going, on a whim.

Possible Business Models

A customer would be presented with multiple journey options, along with their respective expected journey times, environmental footprint, calories burned, and so on.

They could pay per journey, or via a subscription. According to Mr. Costello, the subscription model emerged from an observation that for private vehicle owners in Western countries the “true cost of mobility is approximately $700-800 per month”, when vehicle maintenance, fuel, insurance, deductibles, parking, citations, inspections, government registrations, taxes, and other costs are considered, not to mention time spent at the service station, government registration offices, and towing yards.

Given this, a MaaS subscription providing full access to transport at a monthly cost below the true cost of mobility with a private car could prove attractive. Mobility packages with various price points and access levels may also have a role, as different customers will have different mobility needs. MaaS Global introduced its Whim app in Helsinki in 2017 and has found early success. The different plans available to Whim users in Helsinki are shown below.

Challenges for MaaS

Though MaaS holds real promise for urban mobility, it still faces plenty of roadblocks.

Providing access to any combination of modes through a single app requires integration with providers of different modes (ride-hail, transit, car-rental, etc.) each with their own business and data processes, into a unified mobility operation, which then interacts with the customer. As Mr. Costello describes it, “This is where we want to be, but it’s hard to get there. All the different entities involved are siloed, and not just in their services but their data - the accuracy of that data, its frequency, some of it real time, some of it static. How do you put that all together?” 

Beyond the technical challenges, drivers are usually not aware of their true cost of mobility. This is because most costs associated with car ownership are payed relatively infrequently, while the cost of a ride-share or e-scooter is presented with each and every ride. 

Another challenge lies in “car pride”, a concept introduced by MIT researchers studying mobility systems worldwide. According to the researchers, “The car fulfills not only instrumental transportation functions, but also holds important symbolic and affective meaning for its owners and users. In particular, owning and using a car can be a symbol of an individual’s social status or personal image”. 

Lastly, since a mobility service consists of a menu of transport modes, the entire service suffers when one of these is lacking. This means adequate public infrastructure, effective transit, and safe bike lanes are needed to make MaaS work well.

Despite the challenges, MaaS has the potential to address the daunting (and growing) issues of gridlock, stress, air pollution, and climate change plaguing cities today, and will be a fascinating space to watch in the years ahead. 
 

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